Groundbreaking news has been announced in Texas. A new law establishing a cryptocurrency fund has come into force. Now digital currencies, especially Bitcoin, have an environment to grow and thrive.
On June 21, Governor Greg Abbott signed the Texas Strategic Bitcoin Reserve bill, previously approved by the US Congress. According to the document, Texas is the first American state whose government is now authorized to invest public funds in BTC and other digital assets in order to: 1. reduce financial risks entailed by rising inflation; 2. protect against economic instability; and 3. increase the financial resilience of the state of Texas.
The regulation allows officials to purchase cryptocurrencies, albeit on the particular condition: the average market capitalization of such assets over the past two years must be at least $500 billion. Currently, only Bitcoin meets this requirement, with a market capitalization exceeding $2 trillion.
Ethereum, which ranks second in market capitalization among digital assets, has a total token value estimated at $277 billion. Under these circumstances, the Texas government will not invest in ETH or other, less profitable digital currencies.
The new initiative in Texas has sparked a wave of comments among crypto enthusiasts, many of which have been pessimistic.
“The bad news for Texas is that the law creating a state-managed strategic Bitcoin fund has come into effect. The good news is that the state will be prohibited from buying Bitcoin if its market capitalization drops below $500 billion,” Peter Schiff, a well-known critic of digital currencies, commented on the news.
However, for Bitcoin’s market capitalization to fall below $500 billion, its price would need to drop fourfold. At present, BTC is trading at $106,930, making Schiff’s grim forecast highly unlikely. Moreover, for the Texas government to stop buying up Bitcoin, its price would have to fall below $30,000 – something that seems unrealistic in the near future.
